Measuring Pharma Sales Force Effectiveness – Case Study

Harish, the Zonal Sales Manager at V & V Pharma was in a board room meeting with other middle-level managers which was presided over by their HR Chief Ajay Bhatkal. “What exactly is SFE?” asked Ajay.

But the answer from Harish caught his attention. “Sales Force Effectiveness (SFE) is the average productivity per medical representative of V & V Pharma.”

“Can someone add more to what Harish has said?” asked Ajay

After a minute or two, when there wasn’t any response, Ajay continued. “Harish, you are in the right direction. However, productivity should be aligned with the strategy of V & V Pharma. It should blend with the objectives of marketing, HR, and finance departments.”

“Ajay, can you please explain this further. I am confused,” said Harish.

“Yes, I shall definitely share my thoughts with you. First, all three have different parameters to assess Sales Force Effectiveness (SFE).”  

“What can SFE mean for marketing?”

·        “SFE can mean new prescriptions generated for a brand which can be obtained through continuous prescription research agencies and of course through internal MIS

How many prescriptions have been generated for the V & V Pharma brand vs. prescriptions for competitive brands? 

The ratio will tell you the SFE.

In India, continuous prescription research done by agencies like CMarc and SMSRC give substantial qualitative as well as quantitative data. 

·        If the strategy of say Brandex is to be the market leader in the category, and if Brandex has achieved that, then the SFE is robust. and if Brandex emerges as a very strong brand prescribed by the KOLs and if Brandex is advocated by the KOLs, the SFE is even more robust”

Ajay then asked a rhetorical question “What does SFE mean for the Finance department?”

“SFE can have a different connotation for the finance department. SFE is largely related to financial strategy of V & V Pharma.”

·        “SFE in the eyes of Finance could only mean the profit and loss statement. Higher the profits, better the SFE. Prescription data or the health of the brand may not be quite relevant to them

·        It can also mean optimizing the sales: expenses ratio. Healthier the ratio superior is the SFE. The process and the means to achieve these numbers may not be vital to the finance department. They may want only the final numbers.”

“And for my HR department, do you know what I want? This may seem to be a totally different angle. I want close cooperation with the sales team. My HR team needs to a lot of field work with the front-line salespersons”.

  • “I would like to know the reasons for attrition in V & V Pharma. If it’s growing over time, it may be reflecting a deep, concerning problem with V & V Pharma and our culture. The average attrition of the current year compared to the previous year or previous two years will help me know how good the SFE of V & V Pharma is. Reducing the rates of attrition will effectively pre-empt the high costs of recruitment and training.  
  • It also means preventing the loss of prescriptions and goodwill of doctors when a territory becomes vacant. HRD and finance of V & V Pharma have jointly calculated that if the current rate of attrition of medical representatives, which is currently 17%, is brought down by just 1%, to 16%, V & V Pharma can easily save over Rs. 10 million a year”
  • To the HR, SFE for V & V Pharma also means a healthy rate of attrition at all levels. Mind well, ZERO attrition is also unhealthy. The obvious risk that you may be harboring detrimental underperformers. Zero turnover may damage the growth trajectory and cause frustration among top performers.”

Ajay continued, “HR leaders also have a very important role to play in getting sales, marketing and HR teams on the same page to optimize Sales Force Effectiveness. Needless to mention that just knowing your average output per medical representative won’t give you a complete picture of your sales team’s performance. If the aim is to improve effectiveness, you have to measure and evaluate at a more granular level.”

“How you break it down, and what you look at in terms of effectiveness will be based on your team’s structure and V & V Pharma’s strategy. Here are some commonly used measurements.”

  • “Effectiveness per medical representatives’ territory, brand, and more.
  • Effectiveness at each stage of the process of launching a new product
  • Effectiveness based on tenure of the medical representative in V & V Pharma.
  • The individual effectiveness and performance measured against the average
  • Impact of promotional investments, HR Learning & Development interventions on Sales Force Effectiveness”

Thanking everyone, Ajay concluded the meeting.

Written by:

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Vivek Hattangadi – Chief Mentor at
PharmaState & The Enablers

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